Download pdf - Blue ocean startup 101 - Intro

Blue Ocean Startup:

Gil Rachlinwww.linkedin.com/in/[email protected]://www.skillshare.com/profile/Gil-Rachlin/5240900

Innovation + Execution = Success

Blue Ocean Startup

Lean Startup•RiesEric

Blue Ocean Strategy•MauborgneRenée/W. Chan Kim

Blue Ocean Startup?

Innovate ExecuteLean Startup

•RiesEric

Blue Ocean Strategy•MauborgneRenée/W. Chan Kim

2- Blue Ocean Startup-

Allocate resources asefficiently as possible:

• Develop MVP• Validated Learning• Build Measure Learn

Make the competition irrelevantDIFFERENTIATION and LOW COST =Value innovation

Innovative and strategic Companies


What made them Different from other players?

• friendly service, Speed and frequency• “Speed of a plane at the price of a car anytime

you need it”

• The digital entertainment center of your world• "Welcome to the digital music revolution." (2004)

• Monthly subscription, No late fee, no due dates• “Save gas and time. Let Netflix deliver your movies

again”

Three Characteristics of a good strategy

Focus SplitClear differentiation

from existing trend

CatchySlogan

• friendly service, Speed and frequency• “Speed of a plane at the price of a car anytime

you need it”

• The digital entertainment center of your world• "Welcome to the digital music revolution." (2004)

• Monthly subscription, No late fee, no due dates• “Save gas and time. Let Netflix deliver your movies

again”


How to create innovation?

Innovation Cycle

5

Innovate - Build – Measure – Learn

Ideas/BOS

Innovation

Build /Resources

Learn /Insights

Two Hypothesis:• Value Creation

Hypothesis - BOS• Growth Engine

Hypothesis / Drivers(Growth Engine: Viral,Sticky, Paid)

• Focus on Customer Value• Focus on Conversions, sales and profits• Set your Base Line and Time Frame


Product /MVP

Base Line

Measure /Metrics

Data /Reports

From Lean Startup Loop

Two Hypothesis:• Value Creation

Hypothesis - BOS• Growth Engine

Hypothesis / Drivers(Growth Engine: Viral,Sticky, Paid)

• Product Analytics:• Customer Analytics• Marketing Analytics

Measurement Types / Innovation Accounting:

• Vanity Metrics– e.g. PageViews, Unique Visitors,1 Million Messages per day,

funding• Actionable Metrics - Cause and Effect (vs. Vanity)

– Help make decisions: a/b testing, pricing, cost per acquisition.– Focus on Customer Value, Conversions, sales and profits– Set your Base Line and Time Frame– E.g. when we shipped feature X, did it affect customer

behavior?• Cohort Analysis

– Go to the lowest level of analysis on groups of users withsomething in common.


• Vanity Metrics– e.g. PageViews, Unique Visitors,1 Million Messages per day,

funding• Actionable Metrics - Cause and Effect (vs. Vanity)

– Help make decisions: a/b testing, pricing, cost per acquisition.– Focus on Customer Value, Conversions, sales and profits– Set your Base Line and Time Frame– E.g. when we shipped feature X, did it affect customer

behavior?• Cohort Analysis

– Go to the lowest level of analysis on groups of users withsomething in common.

Cohort Analysis:

Core engagement metric:Time on SiteCohort retention


Courtesy of: http://jonathonbalogh.com/2012/03/24/introduction-to-cohort-analysis-for-startups/

• Did you make product alteration that only Week 3 cohort is exposed to?• Did you change your advertising that week?• Does Week 3 correspond with any major holidays or events?

Engine of Growth Funnel Metrics: AARRR

After ProductOptimization

Initial MVP

PaidViralEngine of Growth

1 7%5%Acquisition: Visit Site /Registration Rate

90%17%Activation: Sign Up 90%17%Activation: Sign Up

5%0.5Retention: Come Back

4%0.3Referral: Invite Friends

11%1%Revenue: Buys Product

$9.99 per month forbackup

One time paymentLifetime Value

Innovate when the barriers go down!

When to Innovate again?

Or else….?!Borders and Barnes &Nobles:Blue Ocean – In Store ServiceNook – Too late?

Amazon –Repeated Blue Ocean:- Online book store to- Online market place to- Mobile book to- Online cloud

Natural Monopoly / Legal Barriers (e.g. Patents) / Sales VolumeConsumer loyalty to Innovative companies etc.

10

Borders and Barnes &Nobles:Blue Ocean – In Store ServiceNook – Too late?

Amazon –Repeated Blue Ocean:- Online book store to- Online market place to- Mobile book to- Online cloud

Blockbuster:Blue Ocean – Rental of movies forfew dollars Instead of high cost ofmovies.Subscription / Streaming – Too late?

Netflix–Repeated Blue Ocean:- Subscription (no late fees)- Online Streaming

- Blue Ocean Startup-

Remember:

• Innovate• Execute• Repeat

Remember:If you get over the hill, you’ll begin to pick up speed!!!


Remember:If you get over the hill, you’ll begin to pick up speed!!!

Stay Hungry, Stay Foolish!Steve Jobs.

Thank you!!!!Gil Rachlin.

Contact Info: [email protected]/in/gilrachlin@gilrachlin

Site: www.blueoceanstartup.com

Free Gift: www.scanbizcards.com/promo/gil

Coming Classes:http://www.skillshare.com/profile/Gil-Rachlin/5240900

Question????

Thank you!!!!Gil Rachlin.

Contact Info: [email protected]/in/gilrachlin@gilrachlin

Site: www.blueoceanstartup.com

Free Gift: www.scanbizcards.com/promo/gil

Coming Classes:http://www.skillshare.com/profile/Gil-Rachlin/5240900


Value Innovation

13

Overall strategy of all company activities to bring valueto themselves and to customers


Customers1) Who are our clients?2) Main usage of offering?

Industry1) What is our industry? Players?2) Industry elements? Characteristics?

Eliminate:• Buy Whole CD for one song

Raise:• Best Sound Quality• Control on Usage and

Usage learning• Availability for users (one

place to find all)• UI, Browse, Search

Example: Apple iTunes – ERRC Elements

NewValueCurve

14

Raise:• Best Sound Quality• Control on Usage and

Usage learning• Availability for users (one

place to find all)• UI, Browse, Search

Reduce:• Price per song (+Try Before

you buy)

Create:• Complement with iPod/

Mac• Liberal Licensing to

download digital content

NewValueCurve


Example: Apple iTunes’ Value Curve Visualization

15

Eliminate Reduce Raise Create


What is Measured?

• Product Analytics:– Insights to usage patterns, bug paths etc.– Improve product roadmap, customer service

etc.• Customer Analytics

– Customer behavior to optimize services forcustomers and dealers.

• Marketing Analytics– Keyword bidding to improve performance and

reduce costs– Weblog data to offer additional services etc.

KPI – Key Performance Indicators


• Product Analytics:– Insights to usage patterns, bug paths etc.– Improve product roadmap, customer service

etc.• Customer Analytics

– Customer behavior to optimize services forcustomers and dealers.

• Marketing Analytics– Keyword bidding to improve performance and

reduce costs– Weblog data to offer additional services etc.

Important tips:

• Marketing Goal- Not reduced cost acquire customers and maximize your

profits

• Metrics depend on Industry / business type- Focus on Customer Value- Focus on Conversions, sales and profits- Set your Base Line and Time Frame

• Examples:- Profitability of Each Customer (Life Time Customer Value)- Cost of Acquiring New Customers- Repeat Purchase Rate of Existing Customers- At least 1000 orders/impressions/clicks for 3% margin of error


• Marketing Goal- Not reduced cost acquire customers and maximize your

profits

• Metrics depend on Industry / business type- Focus on Customer Value- Focus on Conversions, sales and profits- Set your Base Line and Time Frame

• Examples:- Profitability of Each Customer (Life Time Customer Value)- Cost of Acquiring New Customers- Repeat Purchase Rate of Existing Customers- At least 1000 orders/impressions/clicks for 3% margin of error